Customs Ruling HQ H311351 - Ruling Request; U.S. International Trade Commission; Limited Exclusion Order; Investigation No. 337-TA-1120; Certain Human Milk Oligosaccharides and Methods of Producing the Same.

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HQ H311351
Aug 19, 2020

Type : 19 U.S.C. § 1337; Unfair Competition • HTSUS :
Related: H121519

OT:RR:BSTC:IPR H311351 JW/CBC/SEH

VIA EMAIL: [email protected]

Mr. Gary M. Hnath
Mayer Brown LLP
1999 K Street N.W.
Washington, D.C. 20006-1101

RE: Ruling Request; U.S. International Trade Commission; Limited Exclusion Order; Investigation No. 337-TA-1120; Certain Human Milk Oligosaccharides and Methods of Producing the Same. Dear Mr. Hnath: Pursuant to 19 C.F.R. Part 177, the Intellectual Property Rights Branch (“IPR Branch”), Regulations and Rulings, U.S. Customs and Border Protection (“CBP”) issues this ruling letter. We find that Jennewein Biotechnolgies GmbH (“Jennewein”) has met its burden to show that the Human Milk Oligosaccharide, 2’-fucosyllactose (“2’-FL”), manufactured by Jennewein using the E. coli bacterial strain #1242 (“the articles at issue”) does not infringe claims 1–3, 5, 8, 10, 12, 18, and 24–28 of U.S. Patent No. 9,970,018. Thus, CBP’s position is that the articles at issue are not subject to the limited exclusion order issued by the U.S. International Trade Commission (“Commission” or “ITC”) in Investigation No. 337-TA-1120 (“the underlying investigation” or “the 1120 investigation”), pursuant to section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337 (“section 337”). In addition, with each entry of the articles at issue, CBP will require from persons importing the articles at issue (1) a certification, as approved by CBP; and (2) upon request by CBP, to furnish such records or analyses necessary to substantiate the certification. See Certain Human Milk Oligosaccharides and Methods of Producing the Same, Investigation No. 337-TA-1120, EDIS Doc. ID 710646, Limited Exclusion Order (May 19, 2020) (“1120 LEO”) at ¶ 4. We further note that determinations of the Commission are binding authority on CBP and, in the case of conflict, will by operation of law modify or revoke any contrary CBP ruling or decision. This ruling letter is the result of a request for an administrative ruling from CBP, which was conducted on an inter partes basis upon consent of the parties. The process involved the two parties with a direct and demonstrable interest in the question presented by the ruling request: (1) your client as named as a respondent in the underlying investigation, Jennewein; and (2) Glycosyn LLC (“Glycosyn”), the complainant in the underlying investigation. See, e.g., 19 C.F.R. § 177.1(c).

The parties were asked to clearly identify confidential information, including information subject to the administrative protective order in the underlying investigation, with [[red brackets]] in all of their submissions to the CBP. See e.g., CBP Email to Parties dated June 8, 2020. If there is additional information in this ruling letter not currently bracketed in red [[ ]] that either party believes constitutes confidential information, and should be redacted from the published ruling, then the parties are asked to contact CBP within ten (10) working days of the date of this ruling letter. See, e.g., 19 C.F.R. § 177.8(a)(3).

Please note that disclosure of information related to administrative rulings under 19 C.F.R. Part 177 is governed by for example, 6 C.F.R. Part 5, 31 C.F.R. Part 1, 19 C.F.R. Part 103, and 19 C.F.R. § 177.8(a)(3). See, e.g., 19 C.F.R. § 177.10(a). In addition, CBP is guided by the laws relating to confidentiality and disclosure, such as the Freedom of Information Act (“FOIA”), as amended (5 U.S.C. § 552), the Trade Secrets Act (“TSA”) (18 U.S.C. § 1905), and the Privacy Act of 1974, as amended (5 U.S.C. § 552a). A request for confidential treatment of information submitted in connection with a ruling requested under 19 C.F.R. Part 177 faces a strong presumption in favor of disclosure. See, e.g., 19 C.F.R. § 177.8(a)(3). The person seeking this treatment must overcome that presumption with a request that is narrowly tailored and supported by evidence establishing at least that: (1) it is information that is customarily kept private or closely; and either (a) the government provided an express or implied assurance of confidentiality when the information was shared with the government; or (b) there were no express or implied indications at the time the information was submitted that the government would publicly disclose the information. See, e.g., OIP Guidance: Step-by-Step Guide for Determining if Commercial or Financial Information Obtained from a Person is Confidential Under Exemption 4 of the FOIA (posted 10/3/2019).

BACKGROUND

ITC Investigation No. 337-TA-1120

Procedural History at the ITC

The Commission instituted Investigation No. 337-TA-1120 on June 21, 2018, based on a complaint, as amended and supplemented, filed by Glycosyn LLC. Certain Human Milk Oligosaccharides and Methods of Producing the Same, Investigation No. 337-TA-1120, EDIS Doc. ID 712205, Commission Opinion (Public) (June 8, 2020) (“Comm’n Op.”) at 1 (citing 83 Fed. Reg. 28865–66 (June 21, 2018)). The complaint alleged violations of section 337 based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain human milk oligosaccharides, by reason of infringement of certain claims of U.S. Patent Nos. 9,453,230 (“the ’230 patent”) and 9,970,018 (“the ’018 patent”). Id. The complaint also alleged the existence of a domestic industry. Id. The notice of investigation named Jennewein Biotechnologie GmbH as respondent in the investigation. Id. at 2. The Office of Unfair Import Investigations (“OUII”) was also a party to the investigation. Id.

The Commission later terminated the investigation as to all asserted claims of the ’230 patent and certain asserted claims of the ’018 patent based on the withdrawal of the allegations pertaining to those claims. Id. (citations omitted). Claims 1–3, 5, 8, 10, 12, 18, and 23-28 of the ’018 patent remained pending in the investigation. Id.

The presiding administrative law judge (“ALJ”) conducted an evidentiary hearing on May 14–17, 2019. Id. On September 9, 2019, the ALJ issued the final initial determination (“FID”) finding a violation of section 337 based on the infringement of claims 1-3, 5, 8, 10, 12, 18, and 24–28 of the ’018 patent. Id. (citation omitted). Based on a finding of non-infringement of claim 23 of the ’018 patent, the ALJ did not find a violation of section 337 for that claim. Id. (citation omitted). The FID also found that the domestic industry requirement was satisfied. Id.

The FID also contained a Recommended Determination (“RD”) recommending, inter alia, that should a violation of section 337 be found, the Commission issue a limited exclusion order (“LEO”) barring entry of articles that infringe claims 1–3, 5, 8, 10, 12, 18, and 24–28 of the ’018 patent. Id.

On September 23, 2019, Jennewein and the Commission’s Investigative Attorney (“IA”) filed petitions for review of the FID. Id. at 3. On October 1, 2019, Glycosyn and the IA filed responses to the various petitions. Id.

On January 30, 2020, the Commission issued a notice determining to review the FID in part. Id. at 4 (citing 85 Fed. Reg. 6573–75 (Feb. 5, 2020)). Specifically, the Commission determined to review: (1) the FID’s infringement findings with respect to Jennewein’s bacterial strains adjudicated in the investigation, i.e., the #1540 bacterial strain and a derivative thereof, known as the #1540 derivative, or the #2410 strain; and (2) the FID’s decision not to adjudicate infringement as to Jennewein’s alternative bacterial strain, i.e., the TTFL12 strain. Id. (citation omitted); see also id. at 8; see also Certain Human Milk Oligosaccharides and Methods of Producing the Same, Investigation No. 337-TA-1120, EDIS Doc. ID 690229, Initial Determination on Violation of Section 337 and Recommended Determination on Remedy and Bond (Public) (October 13, 2019) (“FID”) at 7. The Commission determined not to review the remainder of the FID. Comm’n Op. at 4.

On February 18, 2020, the parties, including OUII, filed written submissions in response to the Commission’s notice determining to review the FID in part. Id. On February 25, 2020, the parties filed responses to each other’s submissions. Id.

On May 19, 2020 the Commission determined to issue an LEO: (1) covering 2’-fucosyllactose oligosaccharides that infringe claims 1–3, 5, 8, 10, 12, 18, and 24–28 of the ’018 patent (“the Asserted Claims”); (2) including the standard certification provision; and (3) including an explicit carve-out for 2’-fucosyllactose oligosaccharides made with the TTFL12 strain, which, as the Commission determined did not infringe the Asserted Claims. Id. at 28; see also 1120 LEO.

On June 2, 2020, Glycosyn filed a Petition for Reconsideration of Part III(B) of the Commission Opinion. Jennewein and OUII filed responses on June 8th and 9th, respectively.

The ’018 Patent

The ’018 patent is titled “Biosynthesis of Human Milk Oligosaccharides in Engineered Bacteria” and related to “compositions and methods for producing fucosylated oligosaccharides” which are “typically found in human milk” and which “serve critical roles in the establishment of a healthy gut microbiome, in the prevention of disease and in immune function.” Comm’n Op. at 5 (internal quotations omitted) (citing JX-3, ’018 Patent at 1:27–39). The specification states that “the invention . . . makes use of an engineered bacterial E. coli or other bacteria engineered to produce” fucosylated oligosaccharides. Id. (internal quotations omitted) (citing id. at 15:66-16:4).

Claim 1 of the ’018 patent, from which the remaining asserted claims depend recites the following:

A method for producing a fucosylated oligosaccharide in a bacterium, comprising providing an isolated E. coli bacterium comprising, (i) a deletion or functional inactivation of an endogenous ß-galactosidase gene; (ii) an exogenous functional ß-galactosidase gene comprising a detectable level of ß-galactosidase activity that is reduced compared to that of a wild-type E. coli bacterium, wherein the level of ß-galactosidase activity comprises between 0.05 and 200 units; (iii) an inactivating mutation in a colanic acid synthesis gene; and (iv) an exogenous lactose-accepting fucosyltransferase gene; culturing said bacterium in the presence of lactose; and retrieving a fucosylated oligosaccharide from said bacterium or from a culture supernatant of said bacterium.

Id. at 7 (emphasis removed) (citing id. at 111:41-57 (claim 1)).

Claim Construction at the ITC

The terms of the ’018 patent that were construed by the Commission included, inter alia:

Claim Term Construction “exogenous” “plain and ordinary meaning, i.e., originating outside an organism, tissue, or cell” FID at 26.

“functional ß-galactosidase gene” “a functional sequence of DNA that encodes ß-galactosidase” FID at 27.

See also Comm’n Op. at 10.

The “Accused and Redesigned or Alternative Products” in the Underlying Investigation

The accused product in the investigation was Jennewein’s 2’-fucosyllactose oligosaccharides (“2’-FL product”) that was produced using E. coli bacterial strains #1540 and a derivative thereof, known as “the #1540 derivative” or “the #2410 strain” (collectively, “Accused Strains”). Comm’n Op. at 8 (citing FID at 7).

Jennewein also requested adjudication by the Commission of its redesigned or alternative TTFL12 bacterial strain in the investigation. Id. Glycosyn did not accuse that strain in the investigation and the FID declined to adjudicate infringement with respect to that strain. Id. However the Commission reviewed, and determined to reverse, the FID’s decision not to adjudicate infringement with respect to the TTFL12 bacterial strain. Comm’n Op. at 8, 18.

Infringement Analysis at the ITC

Accused Strains

The ALJ found that Glycosyn showed by a preponderance of the evidence that the Accused Strains met the limitations of asserted claims 1–3, 5, 8, 10, 12, 18, and 24–28 of the ’018 patent either literally or under the doctrine of equivalents, and thus Jennewein directly infringed those claims. FID at 35. For those claims, the parties did not dispute, and the ALJ found, that most of the asserted claim limitations were met as compared to the Accused Strains. Id. at 36–8. The only claim limitation, and the only claim, disputed within those claims were:

Disputed Claim 1 Limitation “an exogenous functional ß-galactosidase gene comprising a detectable level of ß-galactosidase activity that is reduced compared to that of a wild-type E. coli bacterium, wherein the level of ß-galactosidase activity comprises between 0.05 and 200 units” FID at 38-57.

Disputed Claim 8 “the method of claim 1, wherein said exogenous functional ß-galactosidase gene comprises an E. coli lacZ gene” FID at 57-60.

i. Disputed Claim 1 Limitation “an exogenous functional ß-galactosidase gene comprising a detectable level of ß-galactosidase activity that is reduced compared to that of a wild-type E. coli bacterium, wherein the level of ß-galactosidase activity comprises between 0.05 and 200 units”

With respect to the disputed claim 1 limitation, “an exogenous functional ß-galactosidase gene comprising a detectable level of ß-galactosidase activity that is reduced compared to that of a wild-type E. coli bacterium, wherein the level of ß-galactosidase activity comprises between 0.05 and 200 units” (emphasis added); the ALJ first looked at the portion in bold and italics. FID at 38. The ALJ found that, that portion of the claim limitation was not literally met. Id. The ALJ stated that “the claim recites ‘a[] . . . functional ß-galactosidase gene,’ which Order 22 construed as ‘a functional sequence of DNA that encodes ß-galactosidase.’” Id. (citing Order No. 22 at 29). The ALJ noted the limitation required “‘a sequence’ of DNA that encodes for the enzyme known as ß-galactosidase” and found that the plain and ordinary meaning of “sequence” implied contiguity. Id. at 38–9. The ALJ further stated that “Jennewein has put forward persuasive evidence that lacZa and lacZ? are, in fact, distinct sequences of DNA in which neither by itself comprises the full collection of nucleotides needed for a ß-galactosidase enzyme” and “[a]s Glycosyn’s own expert states, Jennewein ‘uses two shorter, functional sequences of DNA (lacZa and lacZ?) which, together, encode ß-galactosidase.” Id. at 38–9. (citations omitted). Thus, the ALJ found that Jennewein’s Accused Strains did not literally infringe “an exogenous functional ß-galactosidase gene” because they lacked a single sequence of DNA which functions to create a ß-galactosidase gene. Id. at 39.

However, Glycosyn also argued, and the ALJ found, that Jennewein’s lacZa and lacZ? met “an exogenous functional ß-galactosidase gene” under the doctrine of equivalents function-way-result test. Id. at 39. The ALJ broke his analysis into two parts: (1) “a[] . . . functional ß-galactosidase gene”; and (2) “exogenous.” Id. at 40.

Looking first at “a[] . . . functional ß-galactosidase gene”, the ALJ found that for function and result, there is no difference between the combination of lacZa and lacZ? genes, and any particular individual “functional ß-galactosidase gene.” Id. The ALJ stated that the function and result of the “functional ß-galactosidase gene” is to provide expressible DNA which, when expressed through understood pathways, results in the creation of a ß-galactosidase enzyme. The ALJ noted, “[s]imilarly, the function and result of the lacZa and lacZ? genes is also the provision of DNA which, when expressed, results in the creation of a ß-galactosidase enzyme.” Id. The ALJ also found that the way the result is achieved is substantially the same as claimed. Id. at 41. The ALJ stated, “[i]nasmuch as the ‘way’ analysis focuses on gene expression, that is, the role of the ‘functional ß-galactosidase gene,’ the claim term imposes no limits on the way the result is achieved apart from the basic processes applicable to all DNA – the gene is transcribed and translated, resulting in peptides which, through folding and/or combination with one another, become the ß-galactosidase enzyme.” Id. at 41 (citation omitted). The ALJ found that the evidence also showed that “this universal process also applies to lacZa and lacZ? in the Accused Strains such that when these genes are expressed (i.e., transcribed and translated), the peptides necessary to eventually become the ß-galactosidase enzyme are created.” Id. (citations omitted). The ALJ further stated that “[i]nasmuch as the ‘way’ analysis focuses on genome structure, because the first step in the method of claim 1 is ‘providing an isolated E. coli bacterium’ possessing ‘a . . . functional ß-galactosidase gene,’ the evidence shows that a-complementation was well-known in the art. . . [and] [p]ersons of ordinary skill would have known that using lacZa and lacZ? as the relevant structure, instead of a single gene, would have been effective, albeit ‘overcomplicated.’” Id. (citation omitted). The ALJ concluded that “the lacZa and lacZ? genes in Jennewein’s Accused Strains are equivalent to ‘a[] . . . functional ß-galactosidase gene.’” Id. at 44 (citation omitted).

The ALJ further found that “the lacZa and lacZ? genes are equivalent to ‘an exogenous functional ß-galactosidase gene.’” Id. (emphasis in the original). In doing so, the ALJ noted that “lacZ? was not originally in strain 1540, but was added during the strain’s development, and it is therefore exogenous.” Id. at 44–45 (citing CX-0213 at Fig. 2, -5158 (“Strain 1540 was derived from its parental strain 1242 by integrating a heat inducible lacZ? gene fragment . . . .”).). The ALJ further stated “[b]ecause lacZa and lacZ? together are equivalent to ‘a[] . . . functional ß-galactosidase gene,’ the exogenous nature of lacZ? is enough to meet the limitation.” Id. at 45. Thus, the ALJ found “the lacZa and lacZ? genes in Jennewein’s Accused Strains are equivalent to ‘an exogenous functional ß-galactosidase gene.’” Id.

The Commission found that the FID correctly determined that Jennewein’s Accused Strains include a combination that is equivalent to the claimed “exogenous functional ß-galactosidase gene.” Comm’n Op. at 11 (citing FID at 38-45). The Commission agreed with the FID that “‘the exogenous nature of lacZ? is enough’ to make the combination exogenous and any difference between the claim term ‘an exogenous functional ß-galactosidase gene’ and the accused products is insubstantial.” Id. at 12 (citations omitted). The Commission also found that lacZa, which is present in the genetically engineered strain is also exogenous as compared to the wild-type E.coli bacterium. Id. The Commission stated that “[t]here is no dispute that, as compared to wild-type E. coli bacterium, both lacZa and lacZ? are exogenous, i.e., they ‘originat[e] outside an organism, tissue, or cell.’” Id. at 13 (emphasis in the original) (citations omitted). Thus, the Commission determined to affirm with modification the FID’s finding that the Accused Strains infringe the Asserted Claims under the doctrine of equivalents, and supplemented the FID’s analysis as noted. Id. at 13–4.

ii. Disputed Claim 1 Limitation “an exogenous functional ß-galactosidase gene comprising a detectable level of ß-galactosidase activity that is reduced compared to that of a wild-type E. coli bacterium, wherein the level of ß-galactosidase activity comprises between 0.05 and 200 units”

With respect to the disputed claim 1 limitation, “an exogenous functional ß-galactosidase gene comprising a detectable level of ß-galactosidase activity that is reduced compared to that of a wild-type E. coli bacterium, wherein the level of ß-galactosidase activity comprises between 0.05 and 200 units” (emphasis added); the ALJ next looked at the second half, i.e., the portion in bold and italics. FID at 45. The ALJ first noted that Order 22 clarified that “wherein the level of ß-galactosidase activity comprises between 0.05 and 200 units” is not indefinite and means “ß-galactosidase activity is measureable at between exactly 0.05 and exactly [200/5/4/3/2] Miller Unites, as defined in Miller, J.H., Experiments in Molecular Genetics (Cold Spring Harbor Lab. 1972) at 352-255.” Id. (citing Order 22 at 22–23).

The ALJ stated that “there is insufficient reason to discount or view as wholly unreliable Glycosyn’s testing of the Accused Strains, but there is such reason to discount Jennewein’s” and agreed that “Glycosyn’s testing [was] more relevant for infringement analysis purposes.” Id. at 56. Thus, the ALJ found that Glycosyn’s testing showed a large majority of samples exhibiting Miller Unit activities within the claimed range and concluded that it is “more likely than not that Jennewein’s Accused Strains meet the limitation ‘wherein the level of ß-galactosidase activity comprises between 0.05 and 200 units’ as in claim 1” and also “more likely than not that Jennewein’s Accused Strains infringe claim 1 of the ‘018 patent.” Id. at 57.

iii. Disputed Claim 8 “the method of claim 1, wherein said exogenous functional ß-galactosidase gene comprises an E. coli lacZ gene”

Dependent claim 8 of the ‘018 patent “adds further narrowing detail to the ‘exogenous functional ß-galactosidase gene’ recited” in independent claim 1, from which this claim depends. FID at 57. The ALJ found that “claim 8 is not literally infringed” as “Jennewein’s lacZa and lacZ? genes are neither individually nor collectively a ‘functional ß-galactosidase gene’ in the literal sense, so they are also not literally ‘an E. coli lacZ gene.’” Id. However, the ALJ found that the “lacZa and lacZ? genes in Jennewein’s Accused Strains are equivalent to the ‘E. coli lacZ gene’ of claim 8. Thus, the Accused Strains infringe claim 8 of the ‘018 patent.” Id. at 60.

“Redesigned or Alternative” TTFL12 bacterial strain

The Commission reversed the FID’s decision not to adjudicate the TTFL12 bacterial strain. Comm’n Op. at 18. The Commission then found that Glycosyn failed to satisfy its burden of establishing infringement with respect to Jennewein’s TTFL12 strain. Id. at 23 (citations omitted). The Commission stated that “[u]nlike the accused #1540 strain and its derivative, there is no evidence that a lacZ? fragment was inserted into the TTFL12 strain or any of its precursors.” Id. (citations omitted). Thus, based on the record evidence, the Commission found that the TTFL12 strain did not contain an “‘exogenous functional ß-galactosidase gene comprising a detectable level of ß-galactosidase activity’ as required by the Asserted Claims.” Id. (citations omitted); see also id. at 21 (“Jennewein also produced two key documents, RX-320C and RX-382 . . . supported by expert and witness testimony, showing the relevant features of the TTFL12 strain and establishing that the strain does not infringe the asserted patent because it lacks an exogenous functional ß-galactosidase gene (lacZ).”).

The Commission noted that “Glycosyn presented no expert evidence to establish the presence of a lacZ gene or lacZ? fragment in the TTFL12 strain, and thereby infringement by that strain. . . .” Id. at 24. The Commission stated that “[a]s the FID finds, ‘[i]t is the combination of lacZa and lacZ? which is equivalent to the claimed ‘ß-galactosidase gene,’ and this combination does not exist until lacZ? is inserted into the bacterium’s genome from outside the organism.” Id. at 25 (citing FID at 45). Thus, the Commission found that Glycosyn failed to satisfy its burden to establish infringement by the TTFL12 strain as “Glycosyn failed to establish that the TTFL12 strain contains an ‘exogenous functional ß-galactosidase gene comprising a detectable level of ß-galactosidase activity’ as required by the Asserted Claims.” Id.

The Commission concluded that “the TTFL12 strain does not infringe the Asserted Claims.” Id. at 25.

19 C.F.R. Part 177 Ruling Request

Procedural History

On June 3, 2020, Jennewein submitted a letter to the IPR Branch requesting an administrative ruling pursuant to 19 C.F.R. part 177, which included Exhibits 1–12 (collectively, “Ruling Request”). Jennewein is requesting “a ruling letter that the Human Milk Oligosaccharide, 2’-fucosyllactose (‘2’-FL’), manufactured by Jennewein Biotechnologie GmbH . . . using the E. coli bacterial strain #1242, is not subject to the Limited Exclusion Order . . . issued in Certain Human Milk Oligosaccharides and Methods of Producing the Same, Inv. No. 337-TA-1120 . . . because it does not infringe any of the claims of U.S. Patent No. 9,970,018. . . .” Ruling Request at 1. A copy of the Ruling Request was simultaneously provided by Jennewein to Glycosyn on June 3, 2020. See, e.g., Jennewein emails to IPR Branch dated June 8, 2020 and June 9, 2020.

On June 8, 2020, the IPR Branch had a conference call with Jennewein and Glycosyn where both parties agreed to conduct the ruling request process on an inter partes basis administered by the IPR Branch. See IPR Branch email to Parties dated June 8, 2020. On June 10, 2020, the parties provided the IPR Branch with a joint, proposed schedule for the inter partes ruling request process. See Jennewein email to IPR Branch dated June 10, 2020. On June 11, 2020, the IPR Branch agreed to the joint, proposed schedule, adding only one additional date, a potential extension for the target date of the ruling letter. See IPR Branch email to Parties dated June 11, 2020.

On July 1, 2020, Glycosyn provided its response to Jennewein’s Ruling Request, which included Exhibits A-O (collectively, “Glycosyn Response”). On July 8, 2020, Jennewein provided its reply to Glycosyn’s Response, which included Exhibits 13–15 (collectively, “Jennewein Reply”). On July 15, 2020, Glycosyn provided its sur-reply to Jennewein’s Reply, which included Exhibits P-BB (collectively, “Glycosyn Sur Reply”). On July 17, 2020, while not provided for in the schedule, Jennewein provided an additional statement from SEQ-IT.

On July 22, 2020, in line with Jennewein’s and Glycosyn’s desire for an opportunity to orally discuss the issues, and the schedule, an oral discussion was held with the IPR Branch. See e.g., IPR Branch email to Parties dated July 13, 2020. Due to the national emergency over the coronavirus pandemic, the oral discussion was held remotely by video conference, and the parties provided their respective presentation materials to the IPR Branch on July 22, 2020 (hereinafter, “Jennewein PowerPoint” and “Glycosyn PowerPoint”). On July 29, 2020 both Jennewein and Glycosyn provided their post oral discussion submissions, and Glycosyn’s post oral discussion submission included Exhibits CC to FF (respectively, “Jennewein Submission” and “Glycosyn Submission”).

The Articles at Issue

The articles at issue in the Ruling Request are “the Human Milk Oligosaccharide, 2’-fucosyllactose (‘2’-FL’), manufactured by Jennewein Biotechnologie GmbH . . . using the E. coli bacterial strain #1242”; specifically Jennewein notes that it produces 2’-FL made using the #1242 strain individually and as a blend with other (non 2’-FL) Human Milk Oligosaccharides (“HMOs”). Ruling Request at 1 and 7.

a. Jennewein’s E. coli bacterial strain #1242

Jennewein states that the #1242 strain does not contain the lacZ? gene. Ruling Request at 1 and 5. Jennewein’s technical expert, Prof. Gregory Stephanopoulos explained in his declaration that “[t]he strain #1242 is the direct ancestor of the #1540 and #2410 strains. [] Like the #1540 and #2410 strains, the #1242 strain had its lacZ gene deleted. But unlike the #1540 and #2410 strains, Jennewein’s #1242 strain has no lacZ? gene. While the #1242 strain contains a lacZa gene leftover from the BL21 (DE3) strain . . . lacZa cannot produce a functional ß-galactosidase enzyme. It requires lacZ?, which is absent from the #1242 strain.” Exhibit 10 of Ruling Request at ¶ 13. In addition, Prof. Stephanopoulos notes, “Figure 2 [of GRN571 at Appendix K] at 00288 [provided below] outlines the progression of Jennewein’s genetic engineering from the BL21 (DE3) starting strain to the #1242 strain and onward. It shows the deletion of lacZ from the BL21 (DE3) strain (e.g., ‘lacZ-’ below the first arrow). Pages 00287-288 also show no addition of a beta-galactosidase gene or lacZ? gene in creating the #1242 strain from its parent, the #742 strain, or the starting strain, BL21 (DE3).” Exhibit 10 of Ruling Request at ¶ 14.

Exhibit 2 to Exhibit 10 of Ruling Request at 000288 (Figure 2, Appendix K); see also id. at 000287 (“Initially we used the E. coli fermentation strain #1242 for the fermentation of 2’-FL. This strain lacks a functional lacZ gene. . . .”).

“In July 2019, Jennewein submitted a supplemental application for approval of the #1242 strain as a 2’-FL production strain (‘Supplement to Generally Recognized as Safe Notice 571 for Jennewein 2’-fucosyllactose: Modification to Manufacturing Process’”). Jennewein Submission at 11. This supplement notes “E. coli BL21 (DE3) strain #1242 differs from the 2’-FL production E. coli BL21 (DE3) strain #1540 by lacking the temperature-regulated ß-galactosidase enzyme activity, meaning this strain does not contain the genes lacZ? and ci857 that confer to strain #1540 the ability to synthesize an active ß-galactosidase enzyme when the bacterium is grown at elevated temperatures.” Exhibit 8 of Ruling Request. “On November 11, 2019, the U.S. Food and Drug Administration (‘FDA’) issued a GRAS ‘no-questions’ letter . . . approving the use of Jennewein’s #1242 strain to produce 2’-FL for infant formula.” Jennewein Submission at 11. The FDA stated, “[t]he single difference between strains #1540 and #1242 is a high-temperature expressed lactase used to remove excess lactose from the manufacturing process.” Exhibit 9 of Ruling Request. This is consistent with Dr. Katja Parschat’s, Jennewein’s Deputy Head of Research and Development, statement that “Strain #1242 (JBT-2’FL-?lacZ) is the ancestor to strain #1540 . . . . The only but important difference between strain #1540 and strain #1242 is the ability of strain #1540 to produce a functional ß-galactosidase enzyme under some circumstances when it is not possible for strain #1242.” Exhibit 7 of Ruling Request.

ISSUE

Whether Jennewein has met its burden to show that “the Human Milk Oligosaccharide, 2’-fucosyllactose (‘2’-FL’), manufactured by Jennewein Biotechnologie GmbH . . . using the E. coli bacterial strain #1242” does not infringe any of claims 1-3, 5, 8, 10, 12, 18, and 24-28 of the ‘018 patent, and is thus not subject to the limited exclusion order issued in the 1120 investigation. See, e.g., Ruling Request at 1 and 7.

LAW AND ANALYSIS

Section 337 Exclusion Order Administration

Section 337 of the Tariff Act of 1930 authorizes the Commission to exclude articles from entry into the United States when it has found “[u]nfair methods of competition [or] unfair acts in the importation of [those] articles.” 19 U.S.C. § 1337(a)(1)(A). When the Commission determines there is a violation of section 337, it generally issues one of two types of exclusion orders: (1) a limited exclusion order or (2) a general exclusion order. See Fuji Photo Film Co., Ltd. v. U.S. Int’l Trade Comm’n, 474 F.3d 1281, 1286 (Fed. Cir. 2007).

Both types of orders direct CBP to bar infringing products from entering the country. See Yingbin-Nature (Guangdong) Wood Indus. Co. v. U.S. Int’l Trade Comm’n, 535 F.3d 1322, 1330 (Fed Cir. 2008). “A limited exclusion order is ‘limited’ in that it only applies to the specific parties before the Commission in the investigation. In contrast, a general exclusion order bars the importation of infringing products by everyone, regardless of whether they were respondents in the Commission's investigation.” Id. A general exclusion order is appropriate only if two exceptional circumstances apply. See Kyocera Wireless Corp. v. U.S. Int’l Trade Comm’n, 545 F.3d 1340, 1356. A general exclusion order may only be issued if (1) “necessary to prevent circumvention of a limited exclusion order,” or (2) “there is a pattern of violation of this section and it is difficult to identify the source of infringing products.” 19 U.S.C. § 1337(d)(2); see Kyocera, 545 F.3d at 1356 (“If a complainant wishes to obtain an exclusion order operative against articles of non-respondents, it must seek a GEO [general exclusion order] by satisfying the heightened burdens of §§ 1337(d)(2)(A) and (B).”).

In addition to the action taken above, the Commission may issue an order under 19 U.S.C. § 1337(i) directing CBP to seize and forfeit articles attempting entry in violation of an exclusion order if their owner, importer, or consignee previously had articles denied entry on the basis of that exclusion order and received notice that seizure and forfeiture would result from any future attempt to enter articles subject to the same. An exclusion order under § 1337(d)—either limited or general—and a seizure and forfeiture order under § 1337(i) apply at the border only and are operative against articles presented for customs examination or articles conditionally released from customs custody but still subject to a timely demand for redelivery. See 19 U.S.C. §§ 1337(d)(1) (“The Commission shall notify the Secretary of the Treasury of its action under this subsection directing such exclusion from entry, and upon receipt of such notice, the Secretary shall, through the proper officers, refuse such entry.”); id. at (i)(3) (“Upon the attempted entry of articles subject to an order issued under this subsection, the Secretary of the Treasury shall immediately notify all ports of entry of the attempted importation and shall identify the persons notified under paragraph (1)(C).”) (emphasis added).

Significantly, unlike district court injunctions, the Commission can issue a general exclusion order that broadly prohibits entry of articles that violate Section 337 of the Tariff Act of 1930 without regard to whether the persons importing such articles were parties to, or were related to parties to, the investigation that led to issuance of the general exclusion order. See Vastfame Camera, Ltd. v. U.S. Int’l Trade Comm’n, 386 F.3d 1108, 1114 (Fed. Cir. 2004). The Commission also has recognized that even limited exclusion orders have broader applicability beyond just the parties found to infringe during an investigation. See Certain GPS Devices and Products Containing Same, Inv. No. 337-TA-602, Comm’n Op. at 17, n. 6, Doc ID 317981 (Jan. 2009) (“We do not view the Court’s opinion in Kyocera as affecting the issuance of LEOs [limited exclusion orders] that exclude infringing products made by respondents found to be violating Section 337, but imported by another entity. The exclusionary language in this regard that is traditionally included in LEOs is consistent with 19 U.S.C. § 1337(a)(1)(B)–(D) and 19 U.S.C. § 1337(d)(1).”).

Moreover, “[t]he Commission has consistently issued exclusion orders coextensive with the violation of section 337 found to exist.” See Certain Erasable Programmable Read Only Memories, Inv. No. 337-TA-276, Enforcement Proceeding, Comm’n Op. at 11, Doc ID 43536 (Aug. 1991) (emphasis added). “[W]hile individual models may be evaluated to determine importation and [violation], the Commission's jurisdiction extends to all models of [violative] products that are imported at the time of the Commission's determination and to all such products that will be imported during the life of the remedial orders.” See Certain Optical Disk Controller Chips and Chipsets, Inv. No. 337-TA-506, Comm’n Op. at 56–57, USITC Pub. 3935, Doc ID 287263 (July 2007). “[R]edesigned products are still within the scope of remedial orders that are issued upon the termination of the investigation even if such products were not adjudicated for infringement in the original investigation.” Certain Human Milk Oligosaccharides and Methods of Producing the Same, Investigation No. 337-TA-1120, EDIS Doc. ID 712205, Commission Opinion (Public) (June 8, 2020) at 19 (citations omitted).

Lastly, despite the well-established principle that “the burden of proving infringement generally rests upon the patentee [or plaintiff],” Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S. Ct. 843; 187 L. Ed. 2d 703; 2014 U.S. LEXIS 788 (2014), the Commission has held that Medtronic is not controlling precedent and does not overturn its longstanding practice of placing the burden of proof on the party who, in light of the issued exclusion order, is seeking to have an article entered for consumption. See Certain Sleep-Disordered Breathing Treatment Systems and Components Thereof, Inv. No. 337-TA-879, Advisory Opinion at 6–11. In particular, the Commission has noted that “[t]he Federal Circuit has upheld a Commission remedy which effectively shifted the burden of proof on infringement issues to require a company seeking to import goods to prove that its product does not infringe, despite the fact that, in general, the burden of proof is on the patent to prove, by a preponderance of the evidence, that a given article does infringe. . . .” Certain Integrated Circuit Telecommunication Chips, Inv. No. 337-TA-337, Comm’n Op. at 21, n.14, USITC Pub. 2670, Doc ID 217024 (Aug. 1993), (emphasis in original) (citing Sealed Air Corp. v. U.S. Int’l Trade Comm’n, 645 F.2d 976, 988–89 (C.C.P.A. 1981)).

This approach is supported by Federal Circuit precedent. See Hyundai Elecs. Indus. Co. v. U.S. Int'l Trade Comm'n, 899 F.2d 1204, 1210 (Fed. Cir. 1990) (“Indeed, we have recognized, and Hyundai does not dispute, that in an appropriate case the Commission can impose a general exclusion order that binds parties and non-parties alike and effectively shifts to would-be importers of potentially infringing articles, as a condition of entry, the burden of establishing noninfringement. The rationale underlying the issuance of general exclusion orders—placing the risk of unfairness associated with a prophylactic order upon potential importers rather than American manufacturers that, vis-a-vis at least some foreign manufacturers and importers, have demonstrated their entitlement to protection from unfair trade practices—applies here [in regard to a limited exclusion order] with increased force.”) (emphasis added) (internal citation omitted).

Treatment of Confidential Information Submitted under 19 C.F.R. Part 177

The parties have requested confidential treatment in connection with this 19 C.F.R. Part 177 request for the information bracketed in red in their submissions and seek to have the bracketed information redacted from any ruling that is published in accordance with 19 U.S.C. § 1625(a).

Disclosure of information related to administrative rulings under 19 C.F.R. Part 177 is governed by 6 C.F.R. Part 5, 31 C.F.R. Part 1, 19 C.F.R. Part 103, and 19 C.F.R. § 177.8(a)(3). See e.g., 19 C.F.R. § 177.10(a). In addition, the determination whether to include or redact information within a published ruling is guided by various federal laws—and the relevant standards for their application—that involve confidentiality and disclosure, to include the Freedom of Information Act (“FOIA”) (5 U.S.C. § 552), the Trade Secrets Act (18 U.S.C.§ 1905), and the Privacy Act of 1974 (5 U.S.C. § 552a). See, e.g., CBP HQ Ruling H121519 at 1 (Feb. 8, 2011).

Congress enacted FOIA to overhaul the earlier public-disclosure section of the Administrative Procedure Act that gradually became more “a withholding statute than a disclosure statute.” Milner v. Dep't of the Navy, 562 U.S. 562, 565 (quoting EPA v. Mink, 410 U.S. 73, 79 (1973)). Accordingly, there is a strong presumption in favor of disclosure, which is consistent with the purpose as well as the plain language of the Act. United States Dep't of State v. Ray, 502 U.S. 164, 173 (1991). FOIA mandates that an agency disclose certain information unless it falls within one of nine exemptions. Milner, 562 U.S. at 565. These exemptions are “explicitly made exclusive,” EPA, 410 U.S. at 79, and must be “narrowly construed,” FBI v. Abramson, 456 U.S. 615, 630 (1982).

Exemption 4 of FOIA, which is especially relevant here, provides that FOIA does not apply to matters that are “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. § 552 (b)(4); see Chrysler Corp. v. Brown, 441 U.S. 281, 291 (1979). Further, it is worth noting that, as a general matter, the proscriptions of the Trade Secrets Act are “at least co-extensive with Exemption 4 of FOIA . . . [such that], unless another statute or a regulation authorizes disclosure of the information, the Trade Secrets Act requires each agency to withhold any information it may withhold under Exemption 4 of the FOIA.” Venetian Casino Resort, LLC v. EEOC, 530 F.3d 925, 932 (D.C. Cir. 2008) (quoting Canadian Comm. Corp. v. Air Force, 514 F.3d 37, 39 (D.C. Cir. 2008)) (emphasis added); see also Dow Chem. Co. v. United States, 476 U.S. 227, 234 n.2 (1986) (“Dow’s fear that EPA might disclose trade secrets revealed in these photographs appears adequately addressed by federal law prohibiting such disclosure generally under the Trade Secrets Act, 18 U.S.C. § 1905, and the Freedom of Information Act, 5 U.S.C. § 552(b)(4).”).

That said, “Congress did not design the Freedom of Information Act exemptions to be mandatory bars to disclosure.” Chrysler Corp., 441 U.S. at 293, 294 (“We therefore conclude that Congress did not limit an agency's discretion to disclose information when it enacted the FOIA.”); see GTE Sylvania v. Consumers Union of United States, 445 U.S. 375, 378, n. 2 (1980) (“The theory of the so-called ‘reverse Freedom of Information Act’ suit, that the exemptions to the Act were mandatory bars to disclosure and that therefore submitters of information could sue an agency under the Act in order to enjoin release of material, was squarely rejected in Chrysler Corp.”). As with FOIA, the basic objective of administrative rulings under 19 C.F.R. Part 177 favors disclosure to provide notice to interested persons of the reasons for the agency’s position and its decision-making process. See Chrysler Corp., 441 U.S. at 290 n. 10 (“We observed in Department of Air Force v. Rose that ‘disclosure, not secrecy, is the dominant objective of the Act.’ The legislative history is replete with references to Congress’ desire to loosen the agency's grip on the data underlying governmental decision making.”) (internal citation omitted). The relevant Customs regulations not only mirror the general presumption in favor of disclosure but also place the burden on the person requesting confidentiality to demonstrate that such information qualifies. See generally FCC v. Schreiber, 381 U.S. 279 (1965) (upholding a rule requiring public disclosure except where the proponents of a request for confidential treatment have established their burden to justify that such information should not be disclosed). Moreover, the provisions of the Customs regulations that place the burden on the ruling requester to establish, during the administrative process, that the information at issue constitutes confidential business information is consistent with the burden the government must satisfy in an action brought against it under FOIA challenging the position an agency has taken not to disclose information pursuant to one or more of the exemptions. See 5 U.S.C. § 552(a)(4)(B); see also United States Department of Justice v. Landano, 508 U.S. 165, 171 (1993) (“The Government bears the burden of establishing that the exemption applies.”).

Notably, under 19 C.F.R. § 177.8(a)(3) referenced above, there is a general presumption that “[n]o part of the ruling letter, including names, addresses, or information relating to the business transactions of private parties, shall be deemed to constitute privileged or confidential commercial or financial information or trade secrets exempt from disclosure pursuant to the Freedom of Information Act, as amended (5 U.S.C. § 552), unless, as provided in §?177.2(b)(7), the information claimed to be exempt from disclosure is clearly identified and the reasons for the exemption are set forth.” 19 C.F.R. § 177.2(b)(7) in turn provides, “[i]nformation which is claimed to constitute trade secrets or privileged or confidential commercial or financial information regarding the business transactions of private parties the disclosure of which would cause substantial harm to the competitive position of the person making the request (or of another interested party), must be identified clearly and the reasons such information should not be disclosed, including, where applicable, the reasons the disclosure of the information would prejudice the competitive position of the person making the request (or of another interested party) must be set forth.”

Thus, the test, for administrative rulings under 19 C.F.R Part 177, to determine whether certain information is confidential (and therefore properly redacted from any published ruling) was articulated 19 C.F.R. § 177.2(b)(7). The “substantial harm to a competitive position” standard adopted in 19 C.F.R. § 177.2(b)(7) to handle confidentiality issues was identical to that standard for FOIA Exemption (b)(4) contemporaneously established by the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) in National Parks & Conservation Asso. v. Morton, 498 F.2d 765 (D.C. Cir. 1974) (overturned by Food Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356 (2019)). In 1974, a year before the promulgation of the Customs final rule, the D.C. Circuit construed the word “confidential” in Exemption 4 and determined that commercial information is “confidential” if disclosure would “cause substantial harm to the competitive position of the person from whom the information was obtained.” National Parks, 498 F.2d at 770; see also N.H. Right to Life v. HHS, 136 S. Ct. 383, 384 (2015).

However, the Supreme Court’s recent decision in Food Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356 (2019) overturned National Parks upon which the test in 19 C.F.R. § 177.2(b)(7) is based. Food Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356 (2019) addressed the meaning of the word “confidential” in Exemption 4; specifically “when does information provided to a federal agency qualify as ‘confidential’” under Exemption 4. 139 S. Ct. at 2360. The Court noted that as “FOIA nowhere defines the term ‘confidential” . . . we ask what that term’s ‘ordinary, contemporary, common meaning’ was when Congress enacted FOIA in 1966.” Id. at 2362 (citations omitted). The Court found that “[t]he term ‘confidential’ means then, as it does now, ‘private’ or ‘secret.’” Id. at 2363 (citation omitted). And, “[n]otably lacking from dictionary definitions, early case law, or any other usual source that might shed light on the statute’s ordinary meaning is any mention of the ‘substantial competitive harm’ requirement” articulated in National Parks. Id. at 2363–65.

The Court further found that “[c]ontemporary dictionaries suggest two conditions that might be required for information communicated to another to be considered confidential.” Id. at 2363. The first condition is “information communicated to another remains confidential whenever it is customarily kept private, or at least closely held, by the person imparting it.” Id. (citation omitted). The second condition is “information might be considered confidential only if the party receiving it provides some assurance that it will remain secret.” Id. (citation omitted).

The Court held that for information to be considered confidential under Exemption 4, the first condition must be met as “it is hard to see how information could be deemed confidential if its owner shares it freely.” Id. With respect to whether the second condition had to be met as well, the Court found that “there’s no need to resolve that question in this case” as it was clearly satisfied in the case before it. Id. Thus, the Court concluded “[a]t least where commercial or financial information is both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy, the information is ‘confidential’ within the meaning of Exemption 4.” Id. at 2366.

In light of the above, a request for confidential treatment of information submitted in connection with a ruling requested under 19 C.F.R. Part 177 faces a strong presumption in favor of disclosure. See, e.g., 19 C.F.R. § 177.8(a)(3). The person seeking this treatment must overcome that presumption with a request that is narrowly tailored and supported by evidence establishing at least that: (1) it is information that is customarily kept private or closely; and either (a) the government provided an express or implied assurance of confidentiality when the information was shared with the government; or (b) there were no express or implied indications at the time the information was submitted that the government would publicly disclose the information. See, e.g., OIP Guidance: Step-by-Step Guide for Determining if Commercial or Financial Information Obtained from a Person is Confidential Under Exemption 4 of the FOIA (posted 10/3/2019).

Based on the framework above, any information meeting the criteria discussed above (or information that was redacted from the public version of the agency record at the Commission) will be bracketed in red [[ ]] for redaction from the published ruling.

Law of Patent Infringement

Determining patent infringement requires two steps. Advanced Steel Recovery, LLC v. X-Body Equip., Inc., 808 F.3d 1313, 1316 (2015). The first is to construe the limitations of the asserted claims and the second is to compare the properly construed claims to the accused product. Id. To establish literal infringement, every limitation recited in a claim must be found in the accused product whereas, under the doctrine of equivalents, infringement occurs when there is equivalence between the elements of the accused product and the claimed elements of the patented invention. Microsoft Corp. v. GeoTag, Inc., 817 F.3d 1305, 1313 (Fed. Cir. 2016). One way to establish equivalence is by showing, on an element-by-element basis, that the accused product performs substantially the same function in substantially the same way with substantially the same result as each claim limitation of the patented invention, which is often referred to as the function-way-result test. See Intendis GmbH v. Glenmark Pharms., Inc., 822 F.3d 1355, 1361 (Fed. Cir. 2016).

As for the first step above, “the proper construction of a patent's claims is an issue of Federal Circuit law[.]” Comcast IP Holdings I LLC v. Sprint Communs. Co., 2017 U.S. App. LEXIS 3981, at *11 (Fed. Cir. 2017). Moreover, the ultimate construction of a claim limitation is a legal conclusion, as are interpretations of the patent’s intrinsic evidence (the patent claims, specifications, and prosecution history). UltimatePointer, L.L.C. v. Nintendo Co., 816 F.3d 816, 822 (Fed. Cir. 2016) (citing Teva Pharms. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 841, 190 L. Ed. 2d 719 (2015) ; see also Multilayer Stretch Cling Film Holdings, Inc. v. Berry Plastics Corp., 831 F.3d 1350, 1357 (Fed. Cir. 2016) (“Claim construction is a question of law, reviewed de novo, but any extrinsic fact-finding by the district court in the course of claim construction is reviewed for clear error.”).

Only those claim terms that are disputed must be construed and only to the extent necessary to resolve the dispute. See O2 Micro Int’l Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351, 1362 (2008) (“We, however, recognize that district courts are not (and should not be) required to construe every limitation present in a patent's asserted claims”). Rather, “[c]laim construction is a matter of resolution of disputed meanings and technical scope, to clarify and when necessary to explain what the patentee covered by the claims, for use in the determination of infringement.” Id. (quoting U.S. Surgical Corp. v. Ethicon, Inc., 103 F.3d 1554, 1568 (Fed. Cir. 1997); see also Vanderlande Indus. Nederland BV v. U.S. Int’l Trade Comm’n, 366 F.3d 1311, 1323 (Fed. Cir. 2004).

The second step to establish infringement involves the comparison of the claims to the accused product, which is a question of fact. Apple Inc. v. Samsung Elecs. Co., Ltd., 839 F.3d 1034, 1040 (Fed. Cir. 2016) (en banc).

Analysis

In contrast to CBP’s independent authority to take action against imported articles that infringe a registered and recorded U.S. trademark, see, e.g., 15 U.S.C. § 1124; 19 U.S.C. § 1526, or a copyright, see e.g., 17 U.S.C. § 602; CBP’s ability to take action against imported articles that infringe a patent granted by the U.S. Patent and Trademark Office is limited to the enforcement of exclusion orders issued by the Commission. See also, e.g., FID at 115 (“A limited exclusion order instructs the U.S. Customs and Border Protection (‘CBP’) to exclude from entry all articles that are covered by the patent at issue and that originate from a named respondent in the investigation.”). Thus, the claims at issue here are the asserted claims in the 1120 LEO, i.e., claims 1–3, 5, 8, 10, 12, 18, and 24–28 of the ’018 patent. See 1120 LEO.

Jennewein’s Burden of Proof

The issuance of an exclusion order by the Commission “effectively shift[s] the burden of proof on infringement issues to require a company seeking to import goods to prove that its product does not infringe, despite the fact that, in general, the burden of proof is on the patentee to prove, by a preponderance of the evidence, that a given article does infringe. . . .” Certain Integrated Circuit Telecommunication Chips, Inv. No. 337-TA-337, Comm’n Op. at 21, n.14, USITC Pub. 2670, Doc ID 217024 (Aug. 1993), (emphasis in original) (citing Sealed Air Corp. v. U.S. Int’l Trade Comm’n, 645 F.2d 976, 988–89 (C.C.P.A. 1981)). The term “burden of proof” encompasses “two separate burdens: the ‘burden of persuasion’ (specifying which party loses if the evidence is balanced), as well as the ‘burden of production’ (specifying which party must come forward with evidence at various stages in the litigation).” Microsoft Corp. v. i4i Ltd. P’ship, 564 U.S. 91, 100-101 fn.4 (2011).

The burden of persuasion is “the ultimate burden assigned to a party who must prove something to a specified degree of certainty. . . .” Technology Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1326 (Fed. Cir. 2008); see also Microsoft Corp., 564 U.S. at 106 (“A standard of proof . . . can apply only to a burden of persuasion.”) (citation omitted). Following the issuance of an exclusion order by the Commission, the “would-be importers of potentially infringing articles, as a condition of entry” bear the burden of persuasion to establish noninfringement under a preponderance of the evidence standard. See, e.g., Hyundai Elecs. Indus. Co. v. U.S. Int'l Trade Comm'n, 899 F.2d 1204, 1210 (Fed. Cir. 1990); Certain Integrated Circuit Telecommunication Chips, Inv. No. 337-TA-337, Comm’n Op. at 21, n.14, USITC Pub. 2670, Doc ID 217024 (Aug. 1993), (emphasis in original) (citing Sealed Air Corp. v. U.S. Int’l Trade Comm’n, 645 F.2d 976, 988–89 (C.C.P.A. 1981)). Accordingly, the burden of persuasion is on Jennewein to establish by a preponderance of the evidence that “the Human Milk Oligosaccharide, 2’-fucosyllactose (‘2’-FL’), manufactured by Jennewein Biotechnologie GmbH . . . using the E. coli bacterial strain #1242” does not infringe the Asserted Claims.

Further, Jennewein has the initial burden of going forward with evidence to support its allegation that “the Human Milk Oligosaccharide, 2’-fucosyllactose (‘2’-FL’), manufactured by Jennewein Biotechnologie GmbH . . . using the E. coli bacterial strain #1242” does not infringe the Asserted Claims. See, e.g., Microsoft Corp., 564 U.S. at 107 (citing 21B Fed. Practice § 5122, at 401 (“[T]he same party who has the burden of persuasion also starts out with the burden of producing evidence.”); see also Technology Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1327 (Fed. Cir. 2008) (citation omitted).

Infringement

“[T]he Commission has paramount authority and responsibility under section 337 of the Tariff Act. Its opinion and resultant orders have set the substantive law of this case. . . .” See, e.g., Eaton Corp. v. United States, 29 C.I.T. 1149, 1164–65 (Ct. of Int’l Trade 2005). In accordance, all determinations of the Commission, including any conclusion of law or finding of fact, that arise from an investigation, or related proceeding, are binding authority on CBP, and applied by CBP with preclusive effect in the administration of exclusion orders issued under 19 U.S.C. § 1337.

The question presented by the Ruling Request centers on claim 1 of the ‘018 patent; specifically the claim limitation that Jennewein asserts is not met is “an exogenous functional ß-galactosidase gene.” See, e.g., Jennewein PowerPoint at 17. In the underlying investigation, the Commission construed the claim limitation at issue. See, e.g., Comm’n Op. at 10; see also FID at 38. Claim 1 of the ’018 patent “recites ‘a[] . . . functional ß-galactosidase gene,’ which is construed as ‘a functional sequence of DNA that encodes ß-galactosidase.’” Id. That construction is binding on CBP, thus the question left is whether “the Human Milk Oligosaccharide, 2’-fucosyllactose (‘2’-FL’), manufactured by Jennewein Biotechnologie GmbH . . . using the E. coli bacterial strain #1242” reads onto claim 1 of the ’018 patent as construed by the Commission, which is a question of fact. See e.g., Bai v. L & L Wings, Inc., 160 F.3d 1350, 1353 (Fed. Cir. 1998) (citing North Am. Vaccine, Inc. v. American Cyanamid Co., 7 F.3d 1571, 1574 (Fed. Cir. 1993) (“The second step, determination of infringement, whether literal or under the doctrine of equivalents, is a question of fact.”).

Jennewein primary argument for noninfringement of the Asserted Claims is “the #1242 strain has no ‘ß-galactosidase gene’ literally or by equivalence” because the #1242 strain has no lacZ gene and no lacZ? gene fragment. See, e.g., Ruling Request at 7 and Jennewein Submission at 8-9. Thus, Jennewein states that for the same reason the Commission found TTFL12 to be noninfringing, the #1242 strain also does not infringe. Id. For the reasons below, we find that Jennewein has met its burden of proof to show that “the Human Milk Oligosaccharide, 2’-fucosyllactose (‘2’-FL’), manufactured by Jennewein Biotechnologie GmbH . . . using the E. coli bacterial strain #1242” does not infringe the Asserted Claims either literally, or under the doctrine of equivalents.

Literal

The Commission adopted the FID’s finding that the Accused Strains “do not literally infringe ‘an exogenous functional ß-galactosidase gene’ because they lack a single sequence of DNA which functions to create a ß-galactosidase gene.” FID at 39; Comm’n Op. 10–11. The Commission further adopted the FID’s reasoning “that Jennewein’s Accused Strains include two distinct DNA sequences, namely, lacZa and lacZO, which, together, encode for the ß-galactosidase enzyme”; thus there was no single sequence of DNA, which functions to create a ß-galactosidase gene. Comm’n Op. at 10 (citing FID at 38–39).

Likewise, the evidence submitted by Jennewein also shows that the #1242 strain lacks “a single sequence of DNA which functions to create a ß-galactosidase gene.” As noted by the FID, “[s]train 1540 [which was an Accused Strain] was derived from its parental strain 1242 by integrating a heat inducible lacZ? gene fragment . . . .” See, e.g., FID at 44-5 (citing CX-0213 at Fig. 2, -5158) (emphasis added). Further, as Jennewein’s expert explained in his declaration, “Like the [Accused Strains], the #1242 strain had its lacZ gene deleted.” Exhibit 10 of Ruling Request at ¶ 13. Jennewein’s expert further notes that “Pages 00287–288 [Exh. 2, GRN571 at Appendix K] also show no addition of a beta-galactosidase gene or lacZO gene in creating the #1242 strain from its parent, the #742 strain, or the starting strain, BL21 (DE3).” Exhibit 10 of Ruling Request at ¶ 14. Moreover, the FDA confirmed “[t]he single difference between strains #1540 and #1242 is a high-temperature expressed lactase used to remove excess lactose from the manufacturing process.” Exhibit 9 of Ruling Request.

Even though the burden of persuasion remains with Jennewein, Glycosyn fails to call into question the evidence produced by Jennewein showing that the #1242 strain lacks “a single sequence of DNA which functions to create a ß-galactosidase gene.” See, e.g., Ecolab, Inc. v. Amerikem Labs., Inc., 98 F. Supp. 2d 569, 583 (D. N.J. 2000) (overruled on other grounds) (“Ecolab’s compelling evidence of infringement shifts the burden of production and obliges Envirochem to point to the existence of any genuine issues of material fact.”). For example, while Glycosyn does criticize Prof. Stephanopoulos’ expert declaration, Glycosyn’s criticism is that Prof. Stephanopoulos does not appear to have “any first-hand knowledge about what process Jennewein actually uses in its production facilities.” Glycosyn Response at 6 (citation omitted). Glycosyn does not state that the characteristics of the #1242 strain as described by Prof. Stephanopoulos are incorrect. Id. Accordingly, consistent with the Commission’s reasoning for finding no literal infringement by the Accused Strains, and no infringement either literally or under the doctrine of equivalents by the TTFL12 strain, we find that Jennewein has met its burden of proof to show that the #1242 strain does not literally meet the limitation, “an exogenous functional ß-galactosidase gene” as the #1242 strain lacks a single sequence of DNA which functions to create a ß-galactosidase gene.

Doctrine of Equivalents

The Commission did find, however, that the Accused Strains infringe the Asserted Claims under the doctrine of equivalents. Thus, we turn to whether Jennewein has met its burden of proof to show that there is no infringement by the articles at issue under the doctrine of equivalents. The Commission stated “that the FID correctly determined that Jennewein’s Accused Strains include a combination that is equivalent to the claimed ‘exogenous functional ß-galactosidase gene.’” Comm’n Op. at 11 (citing FID at 38–45). The Commission explained “[a]s the FID finds, ‘[i]t is the combination of lacZa and lacZ? which is equivalent to the claimed ‘ß-galactosidase gene,’ and this combination does not exist until lacZ? is inserted into the bacterium’s genome from outside the organism.” Comm’n Op. at 25 (citations omitted).

First, we note that there is no factual dispute: the #1242 strain does not contain a lacZ? gene fragment. Glycosyn does not argue that the #1242 strain has a lacZ? gene fragment; rather, Glycosyn’s argues that the “lacZa may combine with another enzyme to produce ß-galactosidase.” Glycosyn Submission at 5 (citing Glycosyn Exh. I. Hrg. Tr. (Prather) at 531:9 – 532:7); see also Glycosyn Submission at 9. However, Dr. Kristala L. Jones Prather’s Hearing Transcript, which Glycosyn cited to, to support their argument, appears to show that Dr. Prather was not certain and not able to give a [[ ]] See Exhibit I of Glycosyn Response. Further, even in light of Dr. Prather’s Hearing testimony, which was given in response to a question about the TTFL12 strain; the Commission, in adjudicating the TTFL12 strain, still only looked at whether there was “evidence that a lacZ? fragment was inserted into the TTFL12 strain or any of its precursors.” Comm’n Op. at 23. Likewise, in stating, “Glycosyn presented no expert evidence to establish presence of a lacZ gene or lacZ? fragment in the TTFL12 strain, and thereby infringement by that strain [i.e., the TTFL12 strain]. . . ”; the Commission again correlates infringement with the presence of a lacZ gene or lacZ? fragment. Comm’n Op. at 24. Upon finding that the “record evidence” showed “no evidence that a lacZ? fragment was inserted into the TTFL12 strain or any of its precursors”, the “Commission [found] that the TTFL12 strain does not contain an ‘exogenous functional ß-galactosidase gene comprising a detectable level of ß-galactosidase activity’ as required by the Asserted Claims.” Comm’n Op. at 23–24.

Similarly, for the #1242 strain there is no evidence that a lacZ? fragment was inserted into the #1242 strain or any of its precursors. Instead, the evidence submitted by Jennewein confirms that the #1242 strain does not have a lacZ? fragment. See, e.g., Exhibit 8 of Ruling Request (“E. coli BL21 (DE3) strain #1242 differs from the 2’-FL production E. coli BL21 (DE3) strain #1540 by lacking the temperature-regulated ß-galactosidase enzyme activity, meaning this strain does not contain the genes lacZ? and ci857[.]”). Accordingly, following the Commission’s reasoning, we find that Jennewein has met its burden to establish that the #1242 strain does not meet the limitation, “an exogenous functional ß-galactosidase gene” under the doctrine of equivalents.

As the claim limitation “an exogenous functional ß-galactosidase gene” is not met either literally or under the doctrine of equivalents, Jennewein has met its burden to show that the articles at issue do not infringe claim 1 of the ’018 patent. See, e.g., Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 1535 (Fed. Cir. 1991) (“[T]he failure to meet a single limitation is sufficient to negate infringement of the claim. . . .”). The remaining asserted claims in the 1120 LEO all depend from claim 1, see e.g., Comm’n Op. at 7, consequently the articles at issue also do not infringe the remaining asserted claims. See Wahpeton Canvas Co. v. Frontier, Inc., 870 F.2d 1546, 1552 n.9 (Fed. Cir. 1989) ("One who does not infringe an independent claim cannot infringe a claim dependent on (and thus containing all the limitations of) that claim." (citing Teledyne McCormick Selph v. United States, 558 F.2d 1000, 1004, 214 Ct. Cl. 672 (Ct. Cl. 1977))).

Corroborating Documents

Glycosyn also makes a number of arguments regarding the amount and types of proof that Jennewein would need to establish noninfringement, and that the amount of evidence Jennewein has provided for purposes of this ruling request is not enough to meet its burden of proof to establish noninfringement. See, e.g., Glycosyn Submission at 1. We disagree and, as noted supra, we find that Jennewein has met its burden of proof to establish noninfringement of the articles at issue. Indeed, there is no dispute with respect to the facts: the #1242 strain contains no lacZ gene and no lacZ? gene fragment. Hence, based off the claims as construed by the Commission, we are left with the question of fact in the second step of the infringement analysis, and as these facts were undisputed, Jennewein met its burden of proof. Glycosyn may argue that additional evidence such as Miller Tests, and at least the “sample list of evidence relied on by Glycosyn in the underlying Investigation in proving infringement of Jennewein’s #1540 strain” are required, see Glycosyn Sur Reply at 3–5; however we do not agree. Among other reasons, we note that to prove infringement, Glycosyn had to prove that every claim limitation of the Asserted Claims was met either literally or under the doctrine of equivalents by the Accused Strains. See, e.g., Comm’n Op. at 9. In contrast, here, there is only one claim limitation at issue, “an exogenous functional ß-galactosidase gene.” See, e.g., Jennewein PowerPoint at 17. In the underlying investigation, in determining whether the Accused Strains contained “a[ ] functional ß-galactosidase gene”, the Commission did not rely on the Miller Tests. See, e.g., FID at 38–-45; Comm’n Op. at 10, 13–14.

That said, we still find some merit in Glycosyn’s arguments. When CBP issues a ruling letter finding that Jennewein has met its burden of proof to show that the articles at issue do not infringe the Asserted Claims; the articles are nevertheless “subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” See 19 C.F.R. § 177.9(b)(1) (“The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”). Thus, Glycosyn’s arguments do not relate to the question of establishing noninfringement. Rather, Glycosyn’s arguments relate to how CBP can verify that the facts incorporated in a ruling letter, and the conditions on which a ruling are based, are consistent with an imported product, e.g., 2’-FL.

As Glycosyn notes, “[e]xclusion orders following investigations involving process claims, like this one, present unique challenges for Customs in its enforcement role. This is because the imported article will be the same regardless of which process was used to make it, and thus, there is no way to determine whether the imported article was produced by an infringing process or not.” Glycosyn Response at 1 (citing FID at 118 (“The record evidence shows that 2’-FL produced by a first process is essentially indistinguishable from 2’-FL produced by another. . . .”)). Accordingly, for the reasons below, in accordance with paragraph 4 of the 1120 LEO, with each entry of the articles at issue, CBP will require certification, as approved by CBP, from persons importing the articles at issue. Further, CBP will require these persons to furnish, upon request by CBP, such records or analyses necessary to substantiate the certification. The retention period is provided for in 19 C.F.R. § 163.4.

The Commission may propose certification in an exclusion order when CBP will not be able to determine by inspection whether an imported product violates a particular order. See, e.g., Eaton Corp. v. United States, 29 C.I.T. 1149, 1164 (Ct. of Int’l Trade 2005). However, “as the Commission has previously held, ‘[t]he standard certification “does not apply to redesigns that have not been adjudicated as noninfringing.”’” Comm’n Op. at 27 (citations omitted); see also Eaton Corp. v. United States, 29 C.I.T. 1149, 1164 (Ct. of Int’l Trade 2005) (“An interpretation of the subject certification provision such that the provision would apply to redesigned [articles] for which no determination on infringement has been made by either the Commission or Customs would be contrary to the Commission’s long-standing practice.”).

Here, for the 1120 LEO, “[c]onsistent with its finding that the TTFL12 strain does not infringe the Asserted Claims, the Commission [ ] determined to include an explicit carve-out for the 2’-FL product made with the TTFL12 strain.” Comm’n Op. at 27. “In addition, the Commission [ ] determined that the LEO should include the standard certification provision.” Id. The Commission found “the certification provision is justified because it may not be readily apparent by inspection whether the imported article is covered or exempted by the LEO, i.e., whether the imported 2’-FL product is made by an infringing strain . . . or by a non-infringing strain (i.e., the TTFL12 strain).” Id. Specifically, paragraph 4 of the 1120 LEO states:

At the discretion of CBP and pursuant to the procedures it establishes, persons seeking to import 2’-fucosyllactose oligosaccharides, that are potentially subject to this Order may be required to certify that they are familiar with the terms of this Order, that they have made appropriate inquiry, and thereupon state that, to the best of their knowledge and belief, the products being imported are not excluded from entry under paragraph 1 of this Order. At its discretion, CBP may require persons who have provided the certification described in this paragraph to furnish such records or analyses as are necessary to substantiate this certification.

See 1120 LEO at ¶ 4. Similarly, in light of CBP’s finding that Jennewein has met its burden of proof to establish noninfringement of the articles at issue, CBP is exercising its discretion, to permit use of the certification provision provided in the 1120 LEO for entry of the articles at issue that is consistent with the facts set forth in this ruling letter, i.e., H311351. Hence, to facilitate legitimate trade, CBP will be implementing a certification requirement pursuant to paragraph 4 of the 1120 LEO. The language and form of such certification will be at the approval of CBP. See 1120 LEO at ¶ 4 (“[a]t the discretion of CBP and pursuant to the procedures it establishes. . . .”).

However, as Glycosyn stated, and as confirmed in the underlying investigation, “the imported article will be the same regardless of which process was used to make it. . . .” Glycosyn Response at 1 (citing FID at 118 (“The record evidence shows that 2’-FL produced by a first process is essentially indistinguishable from 2’-FL produced by another. . . .”)). Thus, here, CBP finds that it is appropriate to further, upon request by CBP, “require persons who have provided the certification described in this paragraph to furnish such records or analyses as are necessary to substantiate this certification.” 1120 LEO at ¶ 4. In addition, while we will not discuss these at length, we note that CBP has its own recordkeeping requirements and examination authority, which may be applicable as well. See, e.g., 19 U.S.C. § 1508; 19 U.S.C. § 1509; 19 CFR Part 163. The discretion to require records and analyses to substantiate a certification pursuant to an exclusion order does not supplant any of CBP’s own authority regarding recordkeeping and examination.

Jennewein has [[ ]] See Exhibit B of Glycosyn Response at 347:12–15. Moreover, as stated by Jennewein in the underlying investigation, [[ ]] Id. at 347:19–22. Further, in the underlying investigation Jennewein stated, “Jennewein can readily determine the strain used to make any particular lot of 2’-FL. As Dr. Parkot testified, Jennewein can identify the strain used to produce each lot number of 2’-FL within four hours of a request.” FID at 33 (internal quotations omitted) (citations omitted); see also Exhibit B of Glycosyn Response at 348:10-25; see also Exhibit E of Glycosyn Response ([[ ]]).

During the course of the 19 CFR Part 177 process, Jennewein also provided CBP with sample “documents relating to Jennewein’s production of 2’-FL using the #1242 production strain of E. coli.” ¶ 2 of Exhibit 14 of Jennewein Reply. The declaration accompanying these documents explained that Exhibits B to F in Exhibit 14 all pertained to the same batch and lot number of 2’-FL. Reproduced in full directly below, the declaration explains Exhibit B to F as follows:

[[ ]]

See ¶¶ 4–8 of Exhibit 14 of Jennewein Reply. Jennewein further noted that [[

]] Ruling Request at 7. Jennewein further included “[a]n exemplary label of the packages containing 2’-FL manufactured by using Jennewein’s #1242 production strain” at Exhibit 11. Id.; see also Exhibit 11 of Ruling Request. For “[t]he blend of 2’-FL made using the #1242 with other HMOs”, Jennewein noted that it is “designated ‘Human Milk Oligosaccharide Mix’ and is labeled with [[ ]]. Ruling Request at 7. Further, Jennewein states that the shipping documents of the HMO blend identify the 2’-FL [[ ]]

Thus, the records and analyses that CBP will require persons “who have provided the certification described in this paragraph” to provide, upon request by CBP, will include records and analyses that permit CBP to trace the steps of the manufacturing process and identify the bacterial strain used to produce the specific lot number(s) of 2’-FL identified in a certification. These records and analyses will include, but may not be limited to:

the type provided in Exhibits B to F of Exhibit 14 to Jennewein’s Reply accompanied by a declaration containing at least the information contained in ¶¶ 4–8 of Exhibit 14 of Jennewein Reply; and

gene sequences done in the ordinary course of business that relate to the bacterial strain used in the production of the 2’-FL identified in the certification accompanied by a declaration describing the sequencing methodology and whether the genome contains the lacZ gene or fragments thereof, including the lacZ? gene fragment.

If these records or analyses are in a foreign language, an English translation will need to accompany the foreign language records or analyses. See ¶ 4 of 1120 LEO (“[a]t its discretion, CBP may require persons. . . to furnish such records or analyses as are necessary. . . .”) (emphasis added); see, also e.g., 19 C.F.R. § 122.4 (“A translation in the English language shall be attached to the original and each copy of any form or document written or printed in a foreign language.”). Further, to the extent that, upon review, CBP finds the records and analyses are not sufficient to substantiate the certification, CBP may require additional records or analyses. For example, CBP may require additional records or analyses if the records or analyses provided do not permit CBP to (1) trace the steps of the manufacturing process and identify the bacterial strain used to produce the specific lot number(s) of 2’-FL identified in the certification; or (2) confirm that the strain used to make the specific lot number(s) of 2’-FL identified in the certification has the same material characteristics as the #1242 strain in this ruling letter (i.e., “the #1242 strain contains no lacZ? gene, lacZ gene, or any other beta-galactosidase gene.”). See ¶ 15 of Exhibit 10 of Ruling Request. Finally, we note that acceptance of a certification at any time by CBP does not establish any precedent as to the future acceptance of a certification or exempt an entry from further examination.

IV. HOLDING:

We find that Jennewein has met its burden to establish that “the Human Milk Oligosaccharide, 2’-fucosyllactose (‘2’-FL’), manufactured by Jennewein Biotechnologie GmbH . . . using the E. coli bacterial strain #1242” does not infringe the Asserted Claims. Specifically, we find that the E.coli bacterial strain #1242 does not contain “an exogenous functional ß-galactosidase gene” as required by the Asserted Claims. Accordingly, we find that the articles at issue are not subject to the LEO issued as result of Investigation No. 337-TA-1120.

In addition, with each entry of the articles at issue, CBP will require from persons importing the articles at issue (1) a certification, as approved by CBP; and (2) upon request by CBP, to furnish such records or analyses necessary to substantiate the certification. See 1120 LEO at ¶ 4.

Accordingly, the articles at issue are permitted entry for consumption into the United States, entry for consumption from a foreign-trade zone, or withdrawal from a warehouse for consumption except as provided by law.

The decision is limited to the specific facts set forth herein. If articles differ in any material way from the articles at issue described above, or if future importations vary from the facts stipulated to herein, this decision shall not be binding on CBP as provided for in 19 C.F.R. Part 177.2(b)(1), (2), and (4), Part 177.9(b)(1) and (2).

Sincerely,

Alaina van Horn
Chief, Intellectual Property Rights Branch

cc. Mr. Michael Newman
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
[email protected]